Alliance & Leicester dipped slightly after the bank said first-half profits were almost wiped out due to a £209m hit to the value of risky assets and higher funding costs.

The bank is due to be taken over by Spain's Santander, which analysts are saying will be good for the future of the mortgage lender caught up in the Northern Rock crisis.

The biggest focus of the day is the US non-farm payrolls later this afternoon that will give an important insight into the health of the world's largest economy, which revealed yesterday that it officially shrank in the fourth quarter of last year.

On the gainers, Kingfisher was up by 6.42% at 126.07p after Europe's biggest home improvements retailer said it had agreed to sell its Castorama Italy business for €560m in cash and use the proceeds to reduce its debt.

British Airways was also a surprise riser. Despite dire profit results today from the airline, shares reversed their initial fall to jump by 6.5% at 271.5p.

AstraZeneca and other drugmakers continued to lend their support to the market.